Thursday, July 29, 2010

qotd: The Obama administration supports closed enrollment

The White House
July 28, 2010
Giving Our Kids the Care they Need
By Nancy-Ann DeParle

One important change in the new law is a provision that prevents insurance companies from discriminating against children with pre-existing conditions.

Some state insurance commissioners expressed concern that, without an open enrollment period that was widely communicated, people might wait until their children got sick to enroll them in coverage, causing plans' costs to increase. And we were concerned when last week, some indicated that insurance companies would choose to stop offering policies for children rather than cover kids with pre-existing conditions.

Today, the Administration is releasing new guidance to health insurance plans to help ensure children get the high-quality care they need. The new FAQ document notes that insurance companies may establish an open enrollment period for children with pre-existing conditions.


U.S. Department of Health & Human Services
July 27, 2010
Questions and Answers on Enrollment of Children Under 19 Under the New Policy That Prohibits Pre-Existing Condition Exclusions

Question #2: Do these interim final rules require issuers in the individual health insurance market to offer children under 19 non-grandfathered family and individual coverage at all times during the year?

A: No.  To address concerns over adverse selection, issuers in the individual market may restrict enrollment of children under 19, whether in family or individual coverage, to specific open enrollment periods if allowed under State law.  This is not precluded by the new regulations.


The Hill
July 29, 2010
Insurers back down on child-coverage stance
By Julian Pecquet

Health insurance plans across the country on Wednesday began to backtrack on their decision to pull out of the child-only coverage market after the Obama administration addressed their concerns about the potential damage to their bottom lines.

The Department of Health and Human Services (HHS) on Tuesday clarified regulations mandating that insurance plans agree to cover sick children. HHS made it clear that plans are free to set up specific enrollment periods for their insurance plans if allowed under state laws.

"We think this policy will ensure that children get the comprehensive coverage they need while avoiding this unintended consequence," Scott P. Serota, president and CEO of the Blue Cross and Blue Shield Association, said in a statement. "This is consistent with other public and private health insurance programs."

Karen Ignagni, president and CEO of America's Health Insurance Plans, followed suit.

"Today's announcement will help ensure millions of children have access to affordable healthcare coverage," she said. "For years, structured enrollment periods have been used in the Federal Employees Health Benefits Program, Medicare and in employer-based coverage to minimize disruption for families, seniors and small businesses. Health plans are committed to working with federal and state officials to ensure consumers are aware of all of their coverage options, including how and when they are able to sign up for coverage."

Comment:  A Quote of the Day message earlier this week described how private insurers were getting around the requirement to provide coverage to children with preexisting disorders. The insurers intended to avoid this obligation simply by closing enrollment to new applicants. It is important to understand the counter-response of the Obama administration because it exemplifies just how dysfunctional the private insurance model is that President Obama and Congress chose for us.

From a business perspective, the insurers' complaint was quite valid. If a child was guaranteed insurance no matter the circumstances, it would be a wise decision to save money by forgoing insurance while healthy, but then purchasing the coverage only when needed. Adverse selection (concentrating high-cost patients within a plan) results in the death spiral of insurance premiums (shutting down the plan because it is no longer economically viable).

The insurers said that they could provide coverage for children with preexisting disorders only if open enrollment periods were established. As an example, December could be set aside as the one month in which a child could enroll for the following year. If the parents decided not to enroll the child that month, they could not change their minds during the next twelve months. If something serious came up, that's too bad. They should have known better than to gamble with their child's health.

Whoa! Wasn't the original intention of the reform effort to be sure that each and everyone of us could have the health care that we need without having to face financial hardship? But now the Obama administration is giving its stamp of approval to a policy that will make access worse, not better.

"Open enrollment" is a business concept that serves the insurance industry well, but it is a very deceptive term. Instead of having open enrollment throughout the year, the insurers have really established the concept of "closed enrollment" for most of the year. From the patient's perspective, instead of improving access to insurance products, it greatly impairs access - the opposite of what reform was supposed to bring us. We should change the rhetoric to "closed enrollment," because that's really what they are promoting.

As expected from the industry, the statements of Scott Serota of the Blue Cross and Blue Shield Association and Karen Ignagni of America's Health Insurance plans are very supportive of closed enrollment. Of course, it's in their business interests, even if not in the interests of patients who are shut out.

Suppose we had a single payer national health program - an improved Medicare for all. The concept of closed enrollment totally vanishes since everyone is automatically enrolled.

Imagine a couple of generations from now explaining to someone that there was a time in America that private companies prohibited you from having the insurance you needed because of a quirky rule that closed enrollment for most of the year. Isn't that weird? I mean... like... enrollment is only once... for life!

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